Hurricane Economic Damage and Climate Change: Considering Hurricane Climatology and Regional Resilience

Abstract:

The growing economic damage incurred by U.S.-landfalling hurricanes is arguably due to a mixture of changing hurricane activity with climate change, increased wealth and population exposure along the coast, and changes in vulnerability to landfall events. Considering the multiple contributing factors, we aim to develop a U.S. hurricane economic damage model and connect the climate effects on hurricanes to the resulting expected economic damage. First, we normalize total damages by an estimate of economic exposure, the wealth of the effected counties. This allows us to focus on the relationship between the physical storm landfall attributes and damage. The normalized quantity is called the Damage Fraction. Second, the record of U.S. hurricane economic damage from 1900-2012 is analyzed using a peaks-over-threshold approach in which the generalized Pareto distribution (GPD) is applied to model the probability distribution of Damage Fraction extremes. Two covariates are incorporated into the GPD model to represent multiple hazards, the normalized maximum sustained wind at landfall and the bathymetric slope at the landfall location. The latter represents storm surge risk. The former, which is the storm maximum wind normalized by the local 100-year return period wind from the ASCE 7-10 wind map, serves to incorporate a proxy for regional vulnerability, or resilience.

The new GPD model is applied to datasets of synthetic hurricane tracks downscaled from 20^th century and future (RCP 8.5 scenario) CMIP5 model climates using a statistical-deterministic hurricane model. Using Monte Carlo Simulations, it is shown that across the range of six different CMIP5 model inputs, there is an expected increase of annual Damage Fraction in the future climate. Then we test possible effects of varying levels of future national adaptation by increasing the 100-year return period wind by 5, 10, and 20%. Using the future hurricane climatology, it is shown that the adaptation can help reduce the expected annual Damage Fraction. In one case, adaptation reduces the Damage Fraction even lower than the 20^th century climate expectation.